If you're sure you understand everthing that is going on, you're hopelessly confused. - Walter Mondale
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 1, No. 101, Part I, 22 August 1997



This is Part I of Radio Free Europe/Radio Liberty's Newsline.
Part I is a compilation of news concerning Russia, Transcaucasia
and Central Asia. Part II, covering Central, Eastern, and
Southeastern Europe, is distributed simultaneously as a second
document.  Back issues of RFE/RL NewsLine are available
through RFE/RL's WWW pages:
http://www.rferl.org/newsline/search/

Back  issues of the OMRI Daily Digest are available through
OMRI's WWW pages: http://www.omri.cz/

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Headlines, Part I

*RUSSIAN GOVERNMENT APPROVES DRAFT 1998 BUDGET


*RUSSIAN ARMS EXPORT COMPANY REORGANIZED


*ARMED GROUP ATTACKS TAJIK POLICE STATION

End Note
A DECREE THAT CHANGED THE WORLD

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RUSSIA

GOVERNMENT APPROVES DRAFT 1998 BUDGET. The government on
21 August approved a draft budget for 1998, which officials describe
as "tough" but "realistic." The draft budget foresees revenues of 340
billion new rubles ($58.4 billion, calculated on the basis of the
upcoming ruble redenomination), or an estimated 12.4 percent of
GDP. Planned spending totals 472 billion new rubles, or 17.2 percent
of GDP. The deficit is planned at 132 billion new rubles, or 4.8
percent of GDP. "Kommersant-Daily" noted that the total projected
revenues and expenditures for 1998 are very close to the
"sequestered" version of the 1997 budget. The government cut
spending by about 20 percent this year, citing severe revenue
shortfalls. At the cabinet meeting, Central Bank First Deputy
Chairman Sergei Aleksashenko charged that the Finance Ministry had
not thoroughly examined ways for the government to collect more
revenues, "Kommersant-Daily" and "Nezavisimaya gazeta" reported
on 22 August.

BUDGET CONTAINS ROSY PREDICTIONS. The draft 1998 budget
projects GDP growth of 2 percent next year. First Deputy Economics
Minister Ivan Materov told journalists on 21 August that raw
material exports are likely to provide the basis for next year's
economic growth, Reuters reported. The budget also assumes that a
new tax code will go into effect on 1 January, although the
parliament may not approve that code. In addition, the government
counts on receiving $1.25 billion in repayed debts from countries
that borrowed from the USSR. (Most of those countries are
themselves short of funds.) Last year's budget projected 2 percent
GDP growth, but the government has acknowledged that GDP will at
best be flat in 1997 and could decline by up to 2 percent. Reuters
noted that while the 1997 budget provided for a deficit of 3.5
percent of GDP, this year's deficit is expected to reach 5.35 percent.

DRAFT UNLIKELY TO FIND FAVOR WITH DUMA. State Duma Budget
Committee Deputy Chairman Aleksei Golovkov, a member of the pro-
government Our Home Is Russia faction, told "Kommersant-Daily" on
22 August that in its current form, the draft budget will be opposed
by "all factions" in the Duma. He added that since it appears to be
impossible to find additional sources of revenue, Duma deputies are
likely to call for more deficit spending, which the government will
oppose "to the death." Duma First Deputy Speaker Aleksandr
Shokhin, also of Our Home Is Russia, told ITAR-TASS on 21 August
that the Duma will probably send the budget back to the government
for amendments. Meanwhile, Duma Defense Committee Chairman Lev
Rokhlin charged that the draft budget does not provide enough
funding for defense or military reform, Radio Mayak reported on 21
August. Planned defense spending in 1998 totals 94.5 billion new
rubles ($16 billion), according to Interfax.

RUSSIAN ARMS EXPORT COMPANY REORGANIZED. Yeltsin on 21
August signed several decrees aimed at tightening control over arms
exports. The state company Rosvooruzhenie received the status of
federal state unitary enterprise. Its current director-general, Maj.-
Gen. Aleksandr Kotelkin, a protege of Yeltsin's former bodyguard
Aleksandr Korzhakov, was dismissed. At Prime Minister Viktor
Chernomyrdin's suggestion, Yeltsin appointed Yevgenii Ananev, the
chairman of MAPO bank, as Kotelkin's successor. Rosvooruzhenie will
be able to trade only in arms and military equipment produced for
overseas markets, according to Interfax. Other decrees create two
state enterprises: Russian Technologies will deal with licenses and
know-how, while Promexport will sell used Defense Ministry
armaments that are obsolete as well as the spare parts for them. A
special government commission, to be chaired by Chernomyrdin, will
be created to monitor the activities of the new Rosvooruzhenie.

WHO WILL BENEFIT FROM REORGANIZATION? Interfax quotes
Ananev as saying that the reorganization of Rosvooruzhenie is aimed
at "formalizing and simplifying the system of concluding contracts
and their implementation." An unnamed Russian government source
suggested, however, that the measures are intended to abolish
Rosvooruzhenie's monopoly -- which, he claimed, had undercut the
effectiveness of the arms trade -- and thereby to ensure a "division
of labor." Noting that three days earlier, Yeltsin had praised the work
of Rosvooruzhenie and of Kotelkin personally, "Nezavisimaya gazeta"
on 22 August commented that the reorganization is symptomatic of
the "total chaos reigning in the upper echelons of power." The
newspaper also predicted that it will strengthen the influence of
Deputy Prime Minister and Economics Minister Yakov Urinson, who is
responsible for the arms industry.

GENERAL SAYS MILITARY PERSONNEL TO RECEIVE BACK WAGES
SOON. Col.-Gen. Valerii Manilov, deputy head of the General Staff,
says all wage arrears to soldiers and civilian employees of the
Defense Ministry will be paid within the next few days, Russian news
agencies reported on 21 August. Military personnel will receive other
benefits owed to them by the end of the year, Manilov added.
Manilov, an influential figure in drafting the latest military reform
plans, said the Defense Ministry plans to purchase or build 100,000
apartments across Russia for the approximately 97,000 officers
currently without housing. He also said President Boris Yeltsin has
been informed that plans to staff the armed forces entirely with
contract soldiers by 2005 are "unrealistic," according to the 22
August "Segodnya." Under a May 1996 presidential decree, Russia
was to have established an all-volunteer army by 2000.

SLAIN OFFICIAL BURIED IN ST. PETERSBURG. Hundreds of mourners
packed a hall in St. Petersburg for the funeral of Mikhail Manevich,
deputy governor and head of the city's Property Committee, Russian
news agencies reported on 21 August. Manevich was shot on his way
to work on 18 August by a sniper in an apparent contract killing (see
"RFE/RL Newsline," 18-20 August 1997). Speaking at the ceremony,
First Deputy Prime Minister Anatolii Chubais vowed that the
authorities will find "both those who pulled the trigger and those
who paid with their stinking stolen money," Reuters reported. In
addition to leading St. Petersburg politicians, many prominent
Moscow officials attended the funeral, including State Property
Committee Chairman Maksim Boiko, First Deputy Finance Minister
Aleksei Kudrin, Federal Securities Market Commission Chairman
Dmitrii Vasilev, Our Home Is Russia Duma faction leader Sergei
Belyaev, and Russia's Democratic Choice leader Yegor Gaidar.

OFFICIAL SLAMS DRIVING RECORD OF U.S. DIPLOMATS. Russian
Foreign Ministry spokesman Valerii Nesterushkin has charged that
U.S. diplomats break traffic rules more often than staff of any other
foreign embassy, Russian news agencies reported on 21 August. He
said U.S. embassy staff were cited for 141 traffic violations between
1 January and 18 August. The U.S. State Department on 20 August
announced plans to recall Matthew Bryza, a second secretary of the
U.S. embassy in Moscow, who two days earlier had been driving a car
that hit and critically injured a Moscow pedestrian. Nesterushkin said
the criminal case against Bryza will remain open as police continue
investigating the accident. Bryza cannot be prosecuted unless the U.S.
lifts his immunity. In February, Georgian President Eduard
Shevardnadze lifted the immunity of a Georgian diplomat who
caused a car accident in Washington that killed one woman. That
diplomat is currently in pre-trial detention in the U.S.

SELEZNEV MEETS WITH YELTSIN. Meeting with Yeltsin on 21 August,
State Duma Speaker Gennadii Seleznev expressed concern about
frequent presidential vetoes, Interfax reported. The previous day,
Seleznev had argued that the president appears to be "abusing his
constitutional right" to reject laws passed by parliament (see "RFE/RL
Newsline," 21 August 1997). Seleznev also urged that the upcoming
ruble redenomination not be applied to Sberbank deposits opened
before 1992. High inflation beginning in 1992 wiped out the life
savings of many Russians. Seleznev argued that the government
should increase the real value of old Sberbank deposits by 1,000
times by not taking three zeroes off the rubles in those accounts.
Central Bank officials have said the redenomination will be applied to
Sberbank accounts opened before 1992, according to "Segodnya" on
11 August.

SUSPECTS ARRESTED IN KILLING OF HOCKEY PRESIDENT. Police have
arrested 10 people in connection with the killing in April of Russian
Hockey League President Valentin Sych, according to Russian media.
Among those arrested is Robert Cherenkov, who preceded Sych as
head of what was then called the International Hockey League. Police
say the motive of the murder was financial gain.

YELTSIN SUPPORTS SPACE PROGRAM. Yeltsin said on nationwide
radio on 22 August that Russia will increase spending for its space
program next year, ITAR-TASS reported. Some 3.5 billion new rubles
(about $600 million) will be allotted for the 1998 program. Yeltsin
also urged the youth of the country to work in aviation and
aerospace as those industries "in many respects define Russia's status
as a great power."

DAGESTANI PRIME MINISTER FIRED. The Dagestani State Council on
20 August dismissed Abdurazak Mirabekov, ITAR-TASS reported.
"Nezavisimaya gazeta" said on 22 August that the dismissal was
precipitated by personal rivalry between Mirzabekov and State
Council Chairman Magomedali Magomedov. The Dagestani
Constitution is soon to be amended to introduce the post of president,
which both men intended to contest.

COSSACKS BACK ENVIRONMENTALISTS IN ROSTOV. Representatives
of the Vsevelikii unit of Don Cossacks are supporting efforts by
environmentalists to block further construction of a nuclear power
plant in Volgodonsk (Rostov Oblast), "Segodnya" reported on 22
August. Protesters led by the group Defenders of the Rainbow have
been demonstrating near the plant and have occasionally blocked off
the road leading to the construction site (see "RFE/RL Newsline," 12
August 1997). Police recently turned back a bus carrying Cossacks
who said they planned to defend the protesters, after which the
Vsevelikii Cossacks vowed to seek the support of other Cossack units
in Rostov. The deputy governor of Rostov, who is also ataman of the
Vsevelikii unit, has said that the Rostov legislature will discuss the
plant's construction in September. The environmentalists are
demanding that an oblast-wide referendum be held on whether the
plant should be built.

CHECHEN PRESIDENT WARNS AGAINST DELAY IN SIGNING TREATY.
Addressing journalists on 21 August, Aslan Maskhadov expressed
concern that postponing the signing of a treaty defining relations
between Moscow and Grozny for up to two years could lead to a new
war in Chechnya, Russian agencies reported. Maskhadov singled out
NTV President Igor Malashenko, Security Council Deputy Secretary
Boris Berezovskii, and Interior Minister Anatolii Kulikov as being
opposed to peace in Chechnya. Maskhadov also reiterated Yeltsin's
concern, expressed at a meeting of the Russian Security Council on 20
August, that the U.S. is seeking to increase its influence in the North
Caucasus.

TRANSCAUCASUS AND CENTRAL ASIA

ARMED GROUP ATTACKS TAJIK POLICE STATION. An armed group
loyal to former opposition field commander Mansur Muakhalov
attacked a police station in the town of Kofarnikhon, 20 kilometers
east of Dushanbe, on 21 August, RFE/RL corespondents reported. The
incident occurred after a stolen vehicle containing two of
Muakhalov's supporters was discovered during a routine police check
on the road between Kofarnikhon and the capital. After the men
were detained in the local police station, some 50-70 Muakhalov
supporters surrounded the station and demanded their release.
Fighting broke out when the police refused to meet their demand.
There are unofficial reports of casualties. Muakhalov has been linked
to the United Tajik Opposition, which, however, has denounced the
attack. UTO leader Said Abdullo Nuri said any UTO member who
takes such unilateral action will be punished by the combined forces
of the UTO and the government.

CRIME RISING IN TAJIK CAPITAL. According to reports from RFE/RL
correspondents in Dushanbe, crime is rising sharply in the Tajik
capital. Sporadic gunfire can be heard daily, and the number of
robberies is increasing. The house of a foreign worker for the United
Nations High Commission for Refugees (UNHCR) was burgled on 21
August.

UZBEK GRAIN HARVEST FAILS TO MEET TARGET. The 1997 grain
harvest totals 2.86 million tons, or slightly more than two-thirds of
the target figure of 4 million tons, Reuters reported on 21 August.
This is the third consecutive year that Uzbekistan has failed to meet
its quotas. Recently, Uzbek authorities introduced "centralized
purchasing," whereby sales of flour, sugar, edible oil, and butter are
controlled.

RUSSIANS IN KAZAKHSTAN PROTEST LANGUAGE LAW. At a 21
August press conference organized by the Society of Ethnic Russians
in Kazakhstan, leaders of the country's Russian community "harshly
criticized" Kazakhstan's new language policy, RFE/RL correspondents
in the Kazakh capital reported. Members of the society urged the
Russian State Duma to take "concrete measures" to protect the rights
of Russian-speakers in Kazakhstan, who, they said, account for more
than half the population. Under Kazakhstan's language laws, 50
percent of all broadcasting must be in Kazakh and all ethnic Russian
state officials must be proficient in that language by 2006.

GEORGIAN GUERRILLAS STILL HOLD CIS PEACEKEEPERS. The White
Legion said on 21 August that it will release the three CIS
peacekeepers it abducted on 16 August only if the bodies of two
Georgians recently killed in Abkhazia are returned, ITAR-TASS
reported. Georgian First Deputy Security Minister Avtandil Ioseliani
traveled to Zugdidi, in western Georgia, on 21 August in an attempt
to locate the hostages and secure their release by non-violent means.
In Moscow, Russian Foreign Ministry spokesman Valerii
Nesterushkin expressed Russia's "indignation" that the abduction
took place on territory controlled by Georgia. He said the Georgian
Foreign Ministry has been asked to secure the men's immediate and
unconditional release.

FORMER ARMENIAN PRIME MINISTER PREDICTS "DRAMATIC TIMES."
Speaking at a new conference in Yerevan on 21 August, Hrant
Bagratyan said that Armenia's international reputation has suffered
in the wake of the 1996 disputed presidential elections, RFE/RL's
Yerevan bureau reported. Bagratyan predicted that this fall will be
"one of the most dramatic times" in Armenia's history, given
anticipated concessions by the Armenian leadership over Nagorno-
Karabakh. He criticized his successor, Armen Sargssian, who, he
claimed, had undermined the achievements of Bagratyan's
government during its three-year term. But Bagratyan praised
current Premier Robert Kocharyan and said he hoped Kocharyan
would continue strict economic reforms. Bagratyan is currently an
adviser to the IMF. He founded the liberal opposition party
Azatutyun in April 1997.

KARABAKH PRESIDENTIAL ELECTION UPDATE. Arkadii Ghukasyan,
foreign minister of the unrecognized Nagorno-Karabakh Republic,
said on 21 August that the region should aim for outright
independence, an RFE/RL correspondent in Stepanakert reported.
Ghukasyan, the favorite among three registered candidates for the 1
September Karabakh presidential elections, was addressing
supporters in Stepanakert. He said that if elected, he will seek
international guarantees for Karabakh's security, in which, he said,
Armenia should play a key role. Ghukasyan also said that one of his
priorities would be to strengthen the Karabakh armed forces, already
acknowledged to be among the most professional in the CIS. Meeting
on 21 August with Germany's representative to the Organization for
Security and Cooperation in Europe's Minsk Group, Frank Lambach,
acting Karabakh President Leonard Petrossyan said that Karabakh
will never again become part of Azerbaijan, Interfax reported.

ARMENIAN HUMAN RIGHTS GROUP DEMANDS REOPENING OF
LIBRARY. Armenian human rights groups on 20 August appealed to
the international community to urge the Armenian government to
reopen a human rights library in the city of Vanadzor, RFE/RL's
Yerevan bureau reported. The Armenian Helsinki Association and the
Armenian Center for Constitutional Rights said that on 29 July, a
group of uniformed men belonging to the defense ministry's
volunteer militia [yergrapah] burst into the library's office, forcibly
ousting its personnel and removing its equipment. The library's
director, Gevorg Manukyan, said that despite numerous protests, the
local authorities have taken no action to "restore law and justice."
The Vanadzor human rights library was established in September
1996 with the help of a leading Armenian-U.S. organization to foster
public awareness of human rights issues.

END NOTE

A Decree That Changed the World

by Paul Goble

        On 24 August 1991, Boris Yeltsin, then president of the Russian
Soviet Federative Socialist Republic, issued a decree recognizing the
independence of Estonia, thus ending 50 years of Soviet occupation of
that Baltic country. If the consequences of that decree were
momentous for Estonia, they were, if anything, even greater for the
Soviet Union, for Russia, and for the international community as a
whole. In many respects, Yeltsin's decree was the death certificate
for the Soviet Union, even though that state continued to appear in
the world arena for another four months.
        By recognizing the independence of Estonia, Yeltsin set the
stage for his subsequent recognition of the independence of Latvia
and Lithuania, the two other Baltic republics occupied by Stalin in
1940 as a result of the Molotov-Ribbentrop Pact. But because Yeltsin
was unwilling to acknowledge that the status of the Baltic countries
was fundamentally different from that of the 12 union republics, the
Russian president failed to erect a firewall between them and thus
paved the way for their independence as well.
        Yeltsin's decision to issue a decree on Estonian independence
guaranteed that the dissolution of the Soviet Union would be quick,
because it foreshadowed the notion that the borders of the union
republics should become the borders of the post-Soviet states. It
meant that the dissolution process would be peaceful, precisely
because independence would result not from struggle or long
negotiation but rather from unilateral Russian action. And it created
in the minds of Yeltsin and many other Russian leaders an
expectation that the Balts and other non-Russians would be grateful
and thus remain friendly to Moscow. (That hope was inevitably
misplaced, at least in the case of the Baltic States; but its existence
helps explain why Moscow has acted and continues to act in the way
that it does.)
        The decree had equally fateful consequences for Yeltsin and
Russia. While many around the world had cheered Yeltsin's heroism
during the failed coup only a few days earlier, few world leaders
were willing to view him as the president of an independent country.
His recognition of Estonian independence changed all that. Many
countries around the world hurried to recognize Estonia -- in the
next 10 days alone, more than 40 did so. But in doing that, they were
implicitly recognizing Russia as an independent state as well. That
was not well understood by many diplomats and politicians at the
time, although there was widespread understanding that such steps
constituted some kind of recognition of Yeltsin's right to act as the
predominant leader in Moscow.
        Given the attachment many Western leaders felt to then Soviet
leader Mikhail Gorbachev because of the changes he had brought
about both inside the USSR and in Moscow's relations with the
outside world, many world leaders were reluctant to recognize
Estonia. But by acting on the Estonian demand for independence,
Yeltsin effectively forced their hand, thereby gaining just as much
for himself and his country as the Estonians had gained for theirs.
        In the longer term, Yeltsin's action may have an even greater
impact. By righting an historical wrong, it contributed to the moral
renewal of the Russian people, who also had suffered under Soviet
power. Even more important, it was a significant step in Russia's
retreat from empire, which has given many hope that the Russia of
the future may become a country living at peace with its neighbors
rather than a cause threatening their existence.
        Yeltsin's decree also helped transform the international system,
posing a set of challenges to world leaders that all of them are still
grappling with. It ushered in a post-Soviet and not just post-Cold
War world. In addition to pushing aside Gorbachev and the USSR, it
destroyed many of the landmarks of the bipolar world that had
guided the foreign policies of the great powers since the end of
World War II.
        Most immediately, Yeltsin's decree helped to recreate what had
been a major security challenge in Europe prior to 1939: coping with
the zone of weak states caught between Moscow and Berlin and
between the Baltic and Black Seas. Indeed, much of the current
debate about the eastward expansion of NATO and the EU and about
Russia's role in this region can be seen as the working out of the
consequences of the August 1991 decree.
        Finally, Yeltsin's recognition of Estonia six years ago served as a
reminder that, despite the hopes of some and the fears of others,
history has not ended and that individuals and nations can transform
the world, regardless of the forces arrayed against them.


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